Vale – Page 68 – Republic of Mining

Vale Says Suspended Argentina Project to Cost $11 Billion – by Michelle Yun & Juan Pablo Spinetto (Bloomberg.com – March 18, 2013)

March 19, 2013

http://www.bloomberg.com/

Vale SA (VALE5), the world’s biggest iron- ore producer, said the cost to develop its suspended potash project in Argentina had almost doubled to near $11 billion amid a dispute with the nation.

Inflation and exchange rate fluctuations led the cost of the Rio Colorado project in Mendoza province to surge from the budgeted $5.9 billion, Murilo Ferreira, chief executive officer of Rio de Janeiro-based Vale, said today at the Credit Suisse Asian Investment Conference in Hong Kong.

Vale has joined BHP Billiton Ltd. (BHP) and Rio Tinto Group in shelving projects or cutting spending on expectations a decade- long mining boom has peaked as growth slows in China. Vale said March 12 it mothballed the potash project after the government refused to give it tax breaks. Argentina said last week it will strip Vale of licenses for the project if it fails to resume work.

“We’ve tried to reach some agreement with the government for many and many months, in fact, since the beginning of May 2012,” Ferreira said. “We didn’t receive until the end of 2012 any answer about our demand, and our demand was precisely because of the gap we have in terms of the investment of the project.”

Vale gained 0.3 percent to 33.70 reais in Sao Paulo today, its highest close since March 12.

Vale $15 Billion Tax Verdict Seen Fueling Gain: Corporate Brazil – by Juan Pablo Spinetto, Raymond Colitt & Ney Hayashi (Bloomberg.com – March 15, 2013)

March 15, 2013

http://www.bloomberg.com/

Vale SA (VALE5) investors stand to benefit as a decade-long court battle over $15 billion in back taxes that’s been weighing on the miner’s stock nears an end.

The Supreme Court is set to rule by June on a similar case brought by Coamo Agroindustrial Cooperativa, a farming group from the southern state of Parana that’s suing tax authorities to avoid levies on profits from foreign units. A ruling in favor of the group would be in line with the legislation of most other countries, according to Peixoto & Cury Advogados, a legal firm that specializes in corporate law, including tax issues.

The case is being watched as a benchmark for Brazil’s biggest exporters — from Vale to beermaker Cia. de Bebidas das Americas to steelmaker Gerdau SA (GGBR4) — who are fighting a combined $44 billion in tax claims. A win would be a boon for Vale because investors have already priced in much of the tax losses, said Empiricus Research’s Roberto Altenhofen.

“The market is overreacting a bit about the chances of Vale having to pay all the taxes that are being claimed,” the analyst at the Sao Paulo-based consulting firm said in a phone interview. “It’s almost impossible to predict the outcome of this trial, but what we can say is that Vale seems to be willing to negotiate with tax authorities so a deal can be reached. Vale may end up paying something, but not the full amount.”

Profits Drop at Big Five Miners – by Reuters (New York Times – February 12, 2013)

March 14, 2013

http://www.nytimes.com/

MELBOURNE — Global mining companies are set to unveil their biggest profit decreases in more than a decade and are clearing the decks with multibillion-dollar write-downs on poorly performing assets as they bring in new chief executives.

A sharp drop in commodity prices is likely to have driven down profits for the second half of last year by 40 percent to 50 percent at the top five mining companies when compared with the same period in 2011, forcing them to shelve expansion projects, slash costs and sell assets.

For the top three — BHP Billiton; Vale, based in Brazil; and Rio Tinto — iron ore earnings are likely to cushion losses in coal, aluminum and nickel for the period.

Chief executives are being punished for splurging in the boom years on projects and acquisitions instead of rewarding shareholders more generously, and investors are calling for Rio Tinto and BHP to rethink their policies.

One of the 10 largest shareholders in BHP and Rio Tinto’s Australian-traded stocks said his fund had been pressing both to pay out more of their profit to shareholders. The shareholder, Ross Barker, the managing director of Australian Foundation Investment, said that the companies were not paying higher dividends to shareholders so they could use the funds for investments that would deliver attractive returns.

Vale’s results better than they appear: Prof – by Carol Mulligan (Sudbury Star – March 12, 2013)

March 12, 2013

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Vale SA may have had its worst fourth-quarter in a decade, losing $2.65 billion from October to December last year, but a Sudbury economist says the company still made $5.5 billion in 2012, a healthy profit.

That’s despite the fact Vale earnings fell from $4.67 billion in the fourth quarter of 2011, and that this was the company’s first quarterly loss since the third quarter of 2002.

Jean-Charles Cachon teaches in the faculty of management at Laurentian University and is chair of the Small Business Research Group at the university. Cachon said he found it strange that a company “that’s flush with money would report a loss. So, I wanted to go to the bottom of things, and I did.”

He read Vale’s fourth-quarter report thoroughly and determined its results are not all doom and gloom. When a company’s operations aren’t as profitable as expected, it’s allowed to take impairment charges. Those charges don’t “cost you a penny,” said Cachon, but they allowed Vale to write off about $5.6 billion.

It’s a complicated formula for many to understand, but the bottom line is Vale still made billions in 2012 and was still able to give “a hefty dividend to their shareholders,” said Cachon.

Vale Shelves Potash Venture in Argentina to Preserve Cash – by Juan Pablo Spinetto (Bloomberg.com – March 11, 2012)

March 12, 2013

http://www.bloomberg.com/

Vale SA (VALE3), the third most valuable miner, mothballed a $5.9 billion potash venture in Argentina as the Brazilian company drops projects and writes down assets.

The Rio de Janeiro-based company’s decision was communicated to Argentina’s government today, according to an e- mailed statement. Vale’s shares rallied in Sao Paulo.

Work at Rio Colorado, billed to make Argentina the third- largest exporter of the crop nutrient, was suspended in January so Vale could reassess the project in light of inflation, exchange rate fluctuations and demands from provinces, Chief Executive Officer Murilo Ferreira said Feb. 28. Vale sought tax breaks and partners to make the venture more profitable.

“Major miners are continuing to shed assets, especially those that have greatly surpassed their cost expectations, and slash budgets,” said Robert Verderese, a trader at Knight Capital Group Inc. in New York. “I would expect more to come from Vale.”

Vale erased a loss to rise after the announcement 1.4 percent to 35.22 reais at the close of trading. The stock was the most traded by value on the Brazilian Bovespa index today at 84 percent of its three-month daily average volume.

Vale executive receives honour – by Star Staff (Sudbury Star – March 8, 2013)

March 8, 2013

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

A senior Vale executive in Sudbury has received the second annual Women in Mining Canada National Trailblazer Award. Samantha Espley, Vale’s general manager of mines and mill technical ser vices for its Ontario operations, was honoured during this week’s Prospectors & Developers Association of Canada conference in Toronto.

“I am humbled and honoured to receive this prestigious award from (Women in Mining) Canada,” Espley said in a release. “Mining has allowed me to have a challenging and rewarding career, and I think it’s incumbent on female professionals to promote mining as an attractive career choice to the next generation of young Canadian women.

“I look forward to seeing more women occupy senior management roles in our industry through the work of WIM and other industry partners.”

Espley graduated 25 years ago with an engineering degree. Since then, she has held a number of positions, including for the former Falconbridge Ltd. (now Xstrata) at its Quebec and Sudbury operations. She joined the former Inco (now Vale) in 1990, where she has held roles of increasing responsibility.

NEWS RELEASE: Women in Mining Canada: 2013 Trailblazer Award Recipient – Samantha Espley

March 1, 2013

Toronto, Ontario – 28 February 2013

Women are significantly underrepresented in the minerals exploration and mining industry. Several studies have identified that women are discouraged by a lack of role models in senior management; prompting Women in Mining (WIM) Canada to initiate the Trailblazer Award to highlight successful women and encourage more women to explore a career in the minerals sector.

Samantha Espley has been selected as the recipient of the 2nd annual Trailblazer Award, which recognizes women who have taken personal career risks and helped to advance the careers of other women. The presentation will be made at the 6th annual Women in Mining International reception, on March 5, 2013 at the Metro Toronto Convention Centre during the annual PDAC conference. Over 400 people are expected to be in attendance.

Samantha’s career progression is definitely a remarkable and inspiring climb for women in mining. Graduating with an engineering degree 25 years ago, she worked with Dome Limited in Northern Quebec, Denison-Potacan Potash Corporation in New Brunswick, and then moved to Falconbridge Ltd. working both in their Quebec and Sudbury operations.

Since 1990, she has worked for Inco Ltd. (now Vale) where she has held roles of increasing responsibility, currently leading a multi-disciplinary group of mining and mineral processing engineers, geologists, metallurgists, technologists and other technical staff supporting Vale’s mining and milling operations in Sudbury.

Vale Has Record Quarterly Loss on $5.66 Billion Writedowns – by Juan Pablo Spinetto (Bloomberg.com – February 27, 2013)

February 27, 2013

http://www.bloomberg.com/

Vale SA (VALE3), the world’s largest iron- ore producer, posted a record quarterly loss after writing down the value of some of its assets. Profit missed analysts’ estimates on an adjusted basis.

Vale posted a fourth-quarter net loss of $2.65 billion, or 51 cents a share, compared with a profit of $4.67 billion, or 91 cents, a year earlier, the Rio de Janeiro-based company said today in a regulatory filing. Earnings before interest, taxes, depreciation and amortization, or adjusted Ebitda, declined to $4.39 billion, missing a $4.79 billion average estimate by 14 analysts compiled by Bloomberg.

Last year brought “big challenges” for the company, Chief Executive Officer Murilo Ferreira said on a conference call with reporters tonight after the report was released.

Ferreira is selling assets, cutting investments and writing down unprofitable projects as falling metal and mineral prices led last year to its lowest annual profit since 2009. The company failed to boost iron-ore output in 2012, ceding its title as the world’s second-largest miner by market value to Rio Tinto Group in October and losing market share to its Australian rivals.

[Sudbury]Mining to recover in 2013, board predicts – by Carol Mulligan (Sudbury Star – February 21, 2013)

February 21, 2013

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

New developments in the mining industry in 2013 will contribute to a predicted 1.7% growth in real gross domestic product in Sudbury, up from 0.6% in 2012, according to the Conference Board of Canada.

Sudbury was second from the bottom in economic performance of 28 census metropolitan areas last year, but the board is forecasting it will move up to 22 in 2013. GDP is a measure of the overall economic activity — the value of goods and services produced — within an economy.

Sudbury’s economy was held back last year by significant declines in several sectors, said Jane McIntyre, an economist with the Conference Board of Canada. McIntyre collects data for several cities, Sudbury among them.

In 2011, there was strong growth in the primary and utilities sector, mostly mining, as Vale recovered from the effects of a year-long strike by United Steelworkers.

Weaker metal prices last year, as well as the temporary shutdowns early in the year at Vale mines and the closing of the Frood portion of Frood-Stobie Mine at the end of the year, took a “chunk” out of that sector in 2013.

Silver Wheaton-Vale deal underscores opportunity amid mining firms’ suffering – by Peter Koven (February 7, 2013)

February 7, 2013

The National Post is Canada’s second largest national paper.

As mining companies suffer through rough market conditions, their royalty and streaming counterparts are taking advantage and striking the biggest deals in their history.

“We are busier than we’ve ever been,” said Randy Smallwood, chief executive of Silver Wheaton Corp. “And what’s more important is the quality of the assets that are being brought forward to us is better than I’ve seen in the past.”

This week, Vancouver-based Silver Wheaton announced a US$1.9-billion acquisition of gold streams from mining giant Vale SA of Brazil. It is by far the largest metal streaming deal ever done, surpassing the US$1-billion transaction between Franco-Nevada Corp. and Inmet Mining Corp. that was reached less than six months ago. The Vale deal also includes 10 million Silver Wheaton warrants.

Miners are turning to companies such as Silver Wheaton and Franco-Nevada for financing for a couple of reasons: issuing equity is extremely difficult and dilutive in this market, and capital cost pressures have made it more important than ever to share the financing risk on large projects. The fact that an enormous company such as Vale is giving up future cash flow to secure capital shows how challenging it is for the industry right now.

It wasn’t always this way for Mr. Smallwood. When he took over as CEO in April 2011, Silver Wheaton could not get a deal done with anyone. Precious metal prices were soaring at the time, and companies were demanding far too much money in exchange for their future gold and silver output.

Vale strikes gold deal – by Star Staff (Sudbury Star/Reuters – February 6, 2013)

February 6, 2013

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Vale agreed Tuesday to sell 70% of the gold produced at its Sudbury mines over a 20-year period to Vancouver-based Silver Wheaton in a deal worth $570 million.

Silver Wheaton will also pay $1.33 billion for 25% of the gold produced at the Salobo mine in Brazil over its mine life, the companies announced. In total, the deal is worth $1.9 billion in cash. The Sudbury gold stream covers six producing mines — the Coleman, Copper Cliff, Creighton, Garson, Stobie and Totten mines — and one development mine, the Victor project.

From 2013 to 2015, the Sudbury mines are expected to average attributable production of approximately 30,000 ounces as the Totten mine gradually reaches full production. Gold production is expected to peak once the high-grade Victor deposit begins production.

The deal will immediately boost Silver Wheaton’s production by adding expected average gold production of 110,000 ounces of gold per year over the next 20 years, or 5.9 million silver equivalent ounces. The move into gold is a departure for Silver Wheaton, which has focused almost exclusively on silver stream financing deals.

“While we have traditionally focused on silver, we have never been averse to strategically adding ‘the right’ gold streams to our portfolio,” said Chief Executive Randy Smallwood in a statement.

Vale Brazil – Carajás Iron Ore Mine – by Will Daynes (Business Excellence – January 30, 2013)

January 31, 2013

Business Excellence is a global on-line publication portal for businesses who have stories of excellence to tell: http://www.bus-ex.com/

Simply ore-inspiring

The most widely used of all minerals, iron accounts for approximately 95 percent of the world’s metal production in terms of weight. As the world’s third largest iron ore producer and exporter, Brazil has long reaped the financial benefits provided by one of its largest export products.

The Carajás region of the country boasts some of the richest reserves and concentrations of iron ore anywhere on the planet, with the Carajás Mine, located in the state of Pará in Northern Brazil, holding the distinction of being the world’s largest iron ore mine. Fully owned by Vale, the mine holds up to 7.2 billion metric tonnes of iron ore in proven and probable reserves.

The Carajás Mineral Province was originally discovered entirely by accident when a US Steel helicopter was forced to land on a hill in the area to refuel in 1967, with the first iron ore mine called N4E Mine coming into operation in 1985. In the mine’s first year output reached one million metric tonnes of iron ore, which was processed at a semi-industrial plant. During the second year an industrial-scale processing plant was brought online and this resulted in production rising to 13.5 million metric tonnes of final product.

Mining operations in Carajás are open-pit, with 15-meter-high benches. The off-highway trucks that Vale uses, each capable of carrying loads of over 240 metric tonnes, unload ore at crushing facilities located inside the mines. After this, the material is transported on conveyor belts for further processing.